Lloyd Industries raised $28 million in order to upgrade its roller kiln furnace for the production of ceramic tiles. The company funded this by issuing 15-year bonds with a face value of $1,000 and a coupon rate of 6.2%, paid annually
Security: AAA Corporate AA Corporate A Corporate BBB Corporate BB Corporate
Yield (%): 5.7 5.8 6.0 6.6 6.9
The above table shows the yield to maturity for similar 15-year corporate bonds of different ratings issued at the same time. When Lloyd Industries issued their bonds, they received a price of $962.63. Which of the following is most likely to be the rating these bonds received?
A) AA
B) A
C) BBB
D) BB
Answer: C
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